Biden may get Blocked from Scrapping Keystone XL

Alberta Premier Jason Kenney faced criticism from some Albertans for having reached out to Prime Minister Justin Trudeau to help resolve issues regarding the indications from Biden’s presidential transition team that they may be scrapping the partly constructed Keystone XL pipeline.

Although it may be true that politically Trudeau, in theory, would be in favour of Biden scrapping the pipeline project, Kenney is still pushing his own goals forward by making it known that the life of the Keystone XL pipeline is in the hands of Trudeau. 

Trudeau already agreed to the construction of the Keystone XL pipeline with Trump four years ago, so if he fails to stand up to Biden potentially scrapping the project it will either look as if Trudeau was happy for Canada to lose out on that project, or that he was weak and let the elder statesman walk all over him. 

Albertans may not have confidence in Trudeau ever doing something altruistic for them, but if Trudeau is going to attempt to regain his Liberal majority this spring in a potential election gambit he can’t have an issue like the scrapping of the Keystone XL pipeline get in his way.

Kenney may have another card up his sleeve in this situation, which could potentially cost the Biden administration a large sum of money during an economic slump.

Back in May 2020, Kenney based on the potential situation of having to work with a Biden administration that could kill the Keystone XL pipeline project said:

If that were to happen, obviously we would use every legal means at our disposal to protect our fiscal and economic interests, and I would have to assume that any U.S. administration values the Canada-U.S. trade relationship so much that they would be sensitive to costs of that nature.

Today Kenney reaffirmed this issue on Monday stating that:

If the project is effectively killed by a presidential veto of this nature, a retroactive veto, we believe that under the Canada-United States-Mexico trade agreement and other international instruments that there would be a solid legal basis to at least seek damages.

Kenney also put forward the notion that by scrapping the Keystone XL project now while its under construction, and has crossed the US-Canada border it would be a troubling precedent for cross-border energy projects as well as for their investors. 

If Keystone XL can be scrapped while being in large part completed then in theory any project can be scrapped at any moment, no matter if it is being planned or fully built.

Although it has been indicated Biden would scrap the Keystone XL pipeline, like with Trump on trade deals, it also may just be political bluster to make himself look good on the environment, and with slight tweaks, the project will continue going forward as planned.

What happens next is likely dependent on how much pushback Biden receives from both the Canadian federal government and more moderate Democrats, especially those in states the Keystone XL pipeline was going to provide jobs for.